. . . listed firms fret

The Sunday Mail (Zimbabwe) - - BUSINESS - Enacy Ma­pakame

THE lift­ing of re­stric­tions on im­ports will ease short­ages of key food­stuffs and other com­modi­ties, but some lo­cal man­u­fac­tur­ers might take a hit.

Pub­licly traded mak­ers of con­sumer goods such as Na­tional Foods, Hippo Val­ley, Star Africa, La­farge and Dairi­bord are fore­cast to see a drop in sales vol­umes and earn­ings.

In­di­ca­tions on the Zim­babwe Stock Ex­change (ZSE) are also sug­gest­ing that re­tail stocks like OK Zim­babwe might be neg­a­tively af­fected.

Im­ported items such as cook­ing oil and flour of­ten re­tail cheaper com­pared to lo­cally man­u­fac­tured goods.

Prod­ucts that can now be im­ported in­clude ce­ment, bot­tled wa­ter, pack­ag­ing ma­te­rial, pizza base, an­i­mal fat, cook­ing oil, agro chem­i­cals, stock­feed, ce­re­als, fer­tilis­ers, wheat flour and ice cream af­ter the sus­pen­sion of Statu­tory In­stru­ment 122 of 2017.

This move al­lows those with off­shore and free funds to im­port ba­sic com­modi­ties that have been in short sup­ply.

Now, lo­cal in­dus­try will have to ad­just to the com­pe­ti­tion from im­ports, usu­ally priced cheaper than lo­cally pro­duced goods.

An­a­lysts say the move, although wel­come to avert short­ages on the mar­ket, will have far reach­ing con­se­quences to lo­cal in­dus­try, which was be­gin­ning to re­cover from years of bat­tling low com­pet­i­tive­ness, de­pressed de­mand and low ca­pac­ity util­i­sa­tion.

On the ZSE, shares largely re­mained de­pressed as all mar­ket in­di­ca­tors closed the week point­ing south­wards.

To­tal mar­ket cap­i­tal­i­sa­tion let go of 3,9 per­cent to close the week pegged at US$19,028 bil­lion from prior week’s US$19,779 bil­lion.

The pri­mary in­di­ca­tor, the ZSE All Share In­dex, lost 2,5 per­cent to 174,07 points on wan­ing de­mand.

At 584,72 points, the In­dus­tri­als In­dex re­treated 2,4 per­cent to set­tle at 584,72 points while the Min­ing In­dex fell the heav­i­est with a 5 per­cent de­cline to 216,96 points.

The mar­ket’s elite club, the ZSE Top 10 In­dex, let go of 4 per­cent to 181,29 points on bar­ter­ing of top cap coun­ters.

Con­sumer stocks traded mixed in the week with gains recorded in sugar pro­ces­sor, Hippo, that put on a hefty 16 per­cent to close at US$2,80.

The sugar mak­ing com­pany has ear­lier in­di­cated it ben­e­fit­ted im­mensely from the im­port re­stric­tions, which re­sulted in in­creased vol­umes on the back of ris­ing lo­cal de­mand.

Dairi­bord added 1,1 per­cent to 21,22 cents while largest re­tail group, OK Zim­babwe, put on a mar­ginal 0,9 per­cent to 33,55 cents.

Ce­ment pro­ducer, La­farge, re­mained flat at US$1,53 cents.

Agro-pro­cess­ing group, Na­tional Foods, lost 1,5 per­cent to US$640 from the pre­vi­ous week’s US$6,50.

The man­u­fac­tur­ing gi­ant is ex­pected to feel the pinch from the sus­pen­sion of the im­port ban which will ex­pose it to more com­pe­ti­tion to its flour and cook­ing oil mar­ket where the com­pany has a sig­nif­i­cant share.

Dur­ing the week, the mar­ket’s big­gest com­pany by mar­ket cap­i­tal­i­sa­tion, Econet, suf­fered a 12,8 per­cent de­cline to US$2,18 while bev­er­ages gi­ant, Delta, re­treated 2,2 per­cent to US$3,38.

The restrictive pol­icy mea­sures were in­tro­duced in 2016, then (SI 64 of 2016), to pro­tect lo­cal in­dus­try from un­fair com­pe­ti­tion from im­ports. This was also meant to boost con­sump­tion of lo­cal prod­ucts and en­hance job cre­ation across value chains.

Lo­cal com­pa­nies have been gain­ing trac­tion with im­prove­ments in pro­duc­tion and ca­pac­ity uti­liza­tion recorded dur­ing the pe­riod the statu­tory in­stru­ment was in place.

How­ever, for the past cou­ple of weeks, there has been sig­nif­i­cant short­ages of ba­sic com­modi­ties trig­gered by panic buy­ing and spec­u­la­tive be­hav­iour.

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